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The Risk of Not Rewarding Your Employees

The Risk of Not Rewarding Your Employees

In this challenging economy, many managers are tempted to revert to similar thought processes, believing that their (remaining) employees are "just happy to have a job." But in reality, this is exactly the time that employees need reassurance and motivational leadership.

After massive layoffs, it's particularly difficult to keep employees productive—let alone engaged. They're wondering if there's a next wave of reductions coming; they're worried about the viability of the company itself; they're looking for a sign that their contribution is still necessary and valued.

Putting programs that motivate and engage employees on the back burner is not only a mistake, but it will also be costly in the long run.

Employee motivation, satisfaction and engagement are directly linked to customer satisfaction, loyalty and engagement—all of which are directly linked to profitability. So companies that continue to reward, recognize and engage employees and customers—especially in an economic downturn—consistently outperform their competitors who do not. In fact, a Fortune magazine study of stock performance of the "100 Best Companies to Work For" between 1998 and 2005 found that companies with engaged employees returned 14 percent per year on each dollar invested, while the overall market return was only 6 percent per year.



has been defined by the Incentive Performance Center as:an emotional connection between an employee and his or her job or employer, between a company and its channel partners or between a company and its customers.

Engaged employees understand their value to the organization and put extra effort into their work, going beyond the minimum that is required. They accept the goals of the company as their own and wholeheartedly commit to achieving them.

Engaged customers are advocates of the brand, recommend it to others and often provide valuable feedback for new product and service development.

According to a 2008 study by the Gallup organization:

  • 54 percent of U.S. employees are not engaged.
  • 17 percent are actively disengaged.
  • 29 percent are engaged.

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